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Whitefish energy’s cancelled Puerto Rico contract had a familiar smell

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Before I was elected to Congress, I helped to create the public corruption unit in the office of Illinois Attorney General Lisa Madigan. Unfortunately, business was good. Among the usual suspects were government contracts steered to insiders – leaving Illinois taxpayers holding the bag.

That’s why my ears perked up when I learned about the federal contract to restore the electric grid in Puerto Rico, which was completely destroyed by the recent hurricane that hit that island. That $300 million, no-bid contract went to a company called Whitefish Energy in Montana – a company with exactly two employees when they won the contract.

{mosads}Even worse, the contract contained a “no-audit” provision, which means exactly what it says: the contract cannot be reviewed to ensure that the work is getting done and taxpayers are getting what they pay for. Such a provision should be illegal in any government contract. In fact, such audits should be automatic. We should never waive the checks on government spending that taxpayers deserve.

As a member of the House Oversight Committee, I sent a letter to the leaders of our committee urging them to investigate the full scale of these no-audit provisions in other government contracts asking whether these no-audit provisions are part of any other contracts. And I am urging the committee chairman to undertake public hearings to explore this practice relative to the Whitefish Energy-Puerto Rico power contract and any others that might exist.

Additionally, the White House claims it had nothing to do with the Whitefish Energy receiving the contract. I am hopeful that a congressional investigation will be able to make clear how Whitefish was able to receive this contract. Fortunately, the government of Puerto Rico has cancelled their contract with Whitefish, and the Natural Resources Committee has announced plans to investigate the bidding process for this deal. However, this only begins to scratch the surface. How many other government contracts have included a no-audit clause?  How many millions of dollars have taxpayers been unable to account for? And how much has gone to waste because of it? This is why the Oversight Committee needs to take a thorough and systematic review of government contracting processes and provide a full accounting of no-bid, no-audit contracts. 

Unfortunately, we have seen far too many administration officials play fast and loose with ethics rules. Former HHS Secretary Tom Price resigned from office after it was revealed he spent over $1 million in taxpayer funds for travel on private and military jets. Treasury Secretary Steve Mnuchin has also found taxpayer-funded private travel to be preferable to commercial flights. This problem is apparently so pervasive that now White House chief of staff John Kelly must approve all travel on government “owned, rented, leased, or chartered” aircraft.

I can tell you this based on my experience in the Illinois Attorney General’s Office: When there are too many coincidences surrounding the awarding of a government contract, it’s usually more than mere happenstance. And when public officials are living large on the taxpayer’s expense account, Congress needs to act. While there may be reasonable explanations for both Whitefish’s no-bid, no-audit contract and extensive private jet use, we won’t know the facts until an independent investigation makes their findings known to the public.

It may be that this company with two employees in a small town in Montana was the best choice to rebuild Puerto Rico’s electric grid for $300 million in our tax dollars. But as someone with experience in fighting public corruption in Illinois, this Whitefish Energy deal smells pretty fishy to me. 

Raja Krishnamoorthi, a Democrat from Schaumburg, represents the 8th Congressional District of Illinois.

Tags John Kelly Raja Krishnamoorthi Tom Price

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